Chapter 1    Organizational Performance:    IT Support and Applications1   Chapter 1
Learning Objectives          Describe the digital economy and digital           enterprises.          Recognize the rela...
Doing Business in the Digital    Economy     Conducting business in the digital economy       means using Web-based syste...
Digital Enterprise     Digital enterprise is a new business model that       uses:        IT in a fundamental way to acc...
Digital Enterprise     Uses      converged communication and      computing technology to improve business      processes...
Digital Economy     Digital Economy refers to an economy that       is based on digital technologies.     Sometimes call...
Digital Economy –                   “New” Economy     E-Business: The use of electronic technologies to transact      bus...
Digital Business8   Chapter 1
Major IT characteristics in the    DE     Globalization     Digital systems     Speed     Information overload     Ma...
Major IT characteristics in the     DE      Innovation      Obsolescence      Opportunities      Fraud      Wars     ...
Opportunities for     Entrepreneurs      Provides un-parallel opportunities      Create “dot-com” companies from incepti...
E-Commerce and Network     Computing      Infrastructure for digital organization and        EC is made up of:         N...
-cont..          Standalone    computers or networks           confined to single location use multiple-           locati...
Major capabilities of CIS      CIS = Computerized Information Systems          Perform    high speed, volume and        ...
-cont…          Allow quick and inexpensive access to           vast amounts of information world wide           at any t...
Major capabilities of CIS      Increase the effectiveness and efficiency of       people working in groups in one place o...
Major capabilities of CIS      Enable automation of routine decision       making.      Facilitate complex decision maki...
The Old Economy – Taking Photo’s       1.     Buy film in a store       2.     Load your camera       3.     Take pictures...
The New Economy                   – Taking Photo’s           1st Generation Digital Photography            Old economy (...
The Global Platform of the New     Economy      A huge number of digitizable products; that is        products that can b...
Electronic Business      Businesses    increasingly perform their basic        functions: buying and selling goods and se...
New Economy vs. Old Economy       Example                             Old                               NewBuying and sell...
Business Models      A business model is a method of doing business by which a      company can generate revenue to susta...
Digital Age Business Models       Name-Your-Own Price       Reverse Auctions       Affiliate Marketing       E-Marketp...
Drivers Forcing Changes In Business     Models          Business Pressures            Environmental,        organizationa...
The Drivers of Change (Continued)             Chapter 1              26
Business Pressures, Organizational     Responses, and IT Support      Business Pressure - The business environment is    ...
Three Types of Business     Pressures      Market Pressures:          The Global Economy and Strong Competition         ...
Business Pressures           (Continued)      Technology Pressures:          Technological Innovation and            Obs...
Business Pressures               (Continued)      Societal Pressures:          Social Responsibility          Governmen...
Organizational Responses      Strategic   Systems provide advantages that        enable organizations to increase market ...
Organizational Responses     (Continued)      Make-to-Order     is a strategy of producing        customized products and...
What is an Information System?      An IS is a system that collects, processes, stores,       analyzes and disseminates i...
Information System34   Chapter 1
Formal and Informal IS      Formal      systems include agreed-upon       procedures, standard inputs, outputs and       ...
What is a CBIS?      Computer Based Information System.      CBIS    is an IS that uses computer       technology to per...
Business Information System37   Chapter 1
Components of CBIS      Hardware      Software      Database      Network      Procedures      People      Purpose ...
What is an Information     Technology?      IT is the collection of computing systems       used by an organization.     ...
Why Should You Learn about     Information Technology (IT)?      IT is essential for work in organizations      IT will ...
Why Should You Learn about IT?     (Continued)      IT provides opportunities for people with        disabilities      I...
Managerial Issues  Recognizing opportunities for using IT and Web-   based systems.  Who will build, operate, and mainta...
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  1. 1. Chapter 1 Organizational Performance: IT Support and Applications1 Chapter 1
  2. 2. Learning Objectives  Describe the digital economy and digital enterprises.  Recognize the relationship between performance, organizational pressures, and responses and technology.  Define IS and IT.  Understand what the adaptive enterprise is ?  Understand the support role that IS and IT play in the organization.  Understand the importance of learning about IT.2 Chapter 1
  3. 3. Doing Business in the Digital Economy  Conducting business in the digital economy means using Web-based systems on the Internet and other electronic networks to do transactions electronically.3 Chapter 1
  4. 4. Digital Enterprise  Digital enterprise is a new business model that uses:  IT in a fundamental way to accomplish one or more of three basic objectives:  Reach and engage customers more effectively,  Boost employee productivity,  Improve operating efficiency4 Chapter 1
  5. 5. Digital Enterprise  Uses converged communication and computing technology to improve business processes.  A digital enterprise used networks of computers to e-connect:  all its internal parts via an intranet.  all its business partners via the Internet or Extranet.5 Chapter 1
  6. 6. Digital Economy  Digital Economy refers to an economy that is based on digital technologies.  Sometimes called the Internet economy, the new economy, or the Web economy.  Is a convergence of computing and communication technologies on the Internet and other networks, and the resulting flow of information and technology that is stimulating electronic6 transactions and vast organizational Chapter 1
  7. 7. Digital Economy – “New” Economy  E-Business: The use of electronic technologies to transact business  Collaboration: People and Organizations interact, communicate, collaborate, and search for information  Information Exchange: Storing, processing and transmission of information7 Chapter 1
  8. 8. Digital Business8 Chapter 1
  9. 9. Major IT characteristics in the DE  Globalization  Digital systems  Speed  Information overload  Markets  Digitization  Business models and processes9 Chapter 1
  10. 10. Major IT characteristics in the DE  Innovation  Obsolescence  Opportunities  Fraud  Wars  Organizations10 Chapter 1
  11. 11. Opportunities for Entrepreneurs  Provides un-parallel opportunities  Create “dot-com” companies from inception  Apply EC business models to different business areas  Sell products online  Online medical advise  Secured e-payments11 Chapter 1
  12. 12. E-Commerce and Network Computing  Infrastructure for digital organization and EC is made up of:  Networked computing (distributed computing) which connects computers and other e-devices via telecommunication networks.12 Chapter 1
  13. 13. -cont..  Standalone computers or networks confined to single location use multiple- location networked computers connected to the global networked environment known as Internet.  Internet’s counterpart within an organizations, are called an Intranet.  Some link intranets to their business partners over networks called Extranets13 Chapter 1
  14. 14. Major capabilities of CIS  CIS = Computerized Information Systems  Perform high speed, volume and numerical computations.  Provide fast, accurate, reliable, and inexpensive communication within and between organizations, any time any place.  Store huge amounts of information in an easy-to-access, yet small space.14 Chapter 1
  15. 15. -cont…  Allow quick and inexpensive access to vast amounts of information world wide at any time.  Enable collaboration anywhere, anytime.15 Chapter 1
  16. 16. Major capabilities of CIS  Increase the effectiveness and efficiency of people working in groups in one place or in several locations.  Vividly present information that challenges the human mind.  Facilitate work in hazardous environments.  Automate both semiautomatic business processes and manually done tasks.  Facilitate global trade.16 Chapter 1
  17. 17. Major capabilities of CIS  Enable automation of routine decision making.  Facilitate complex decision making.  Can be wireless, thus supporting unique applications anywhere.  Accomplish all of the above much less expensively than when done manually.17 Chapter 1
  18. 18. The Old Economy – Taking Photo’s 1. Buy film in a store 2. Load your camera 3. Take pictures 4. Take roll of film to store for processing 5. Pickup the film when ready 6. Select specific photos for enlargement 7. Mail to family and friends18 Chapter 1
  19. 19. The New Economy – Taking Photo’s  1st Generation Digital Photography  Old economy (except 6 and 7) were replaced by using a scanner and emailing  2nd Generation Digital Photography  Use a Digital Camera, no film, no processing  3rd Generation Digital Photography  Your Digital Camera is now in your mobile phone, your binoculars, or palmtop computer.19 Chapter 1
  20. 20. The Global Platform of the New Economy  A huge number of digitizable products; that is products that can be converted to digital format. Most common are: books, movies, magazines, TV and radio programming, electronic games, music CDs, and computer software.  Consumers and firm conducting financial transaction digitally.  Physical goods such as home appliances and automobiles that contain embedded computer chips and connectivity capabilities.20 Chapter 1
  21. 21. Electronic Business  Businesses increasingly perform their basic functions: buying and selling goods and services, servicing customers, and collaborating with business partners electronically  This process is known as electronic business (E- business) or electronic commerce (E- commerce)21 Chapter 1
  22. 22. New Economy vs. Old Economy Example Old NewBuying and selling textbook Visit the bookstore Visit web site for publishers and retailersRegistering for classes Walk around campus to Access campus web site Departments, Registrar’s office, etc.Photography Buy film, use camera, take Use digital camera picture, take it for processingPaying for Gasoline Fill up your car, go inside, pay Use speed pass token; wave cash or credit card over the sensor and goPaying for Transportation Pay cash, metal tokens Metro cards electronic cardsPaying for goods Visit store, select item, pay, go Use self-service kiosksSupplying commercial photos Use newspapers, paper, Use hub-like supply chain with catalog, or online digitized picture Chapter 1 22
  23. 23. Business Models  A business model is a method of doing business by which a company can generate revenue to sustain itself. The model spells out how the company adds value to create a product or service. (Value Chain)  Nokia makes and sells cell phones  A TV station provides free broadcasting. Its survival depends on a complex model involving advertisers and content providers  Internet portals, such as Yahoo, also use a complex business model.23 Chapter 1
  24. 24. Digital Age Business Models  Name-Your-Own Price  Reverse Auctions  Affiliate Marketing  E-Marketplaces and Exchanges  Electronic aggregation (buying groups)24 Chapter 1
  25. 25. Drivers Forcing Changes In Business Models Business Pressures  Environmental, organizational, and technological factors  React frequently and quickly to both the threats and the opportunities resulting from this new business environment Business Critical Response Activities  A response can be a reaction to a pressure already in existence, an initiative intended to defend an organization against future pressures, or an activity that exploits an opportunity created by changing conditions25 Chapter 1
  26. 26. The Drivers of Change (Continued) Chapter 1 26
  27. 27. Business Pressures, Organizational Responses, and IT Support  Business Pressure - The business environment is the combination of social, legal, economic, physical, and political factors that affect business activities  Significant changes in any of these factors are likely to create business pressure on the organization  The three types of business pressures faced are: market, technology, and societal pressures.27 Chapter 1
  28. 28. Three Types of Business Pressures  Market Pressures:  The Global Economy and Strong Competition  The Changing Nature of the Workforce  Powerful Customers28 Chapter 1
  29. 29. Business Pressures (Continued)  Technology Pressures:  Technological Innovation and Obsolescence  Information Overload29 Chapter 1
  30. 30. Business Pressures (Continued)  Societal Pressures:  Social Responsibility  Government Regulation and Deregulation  Protection Against Terrorist Attacks  Ethical Issues30 Chapter 1
  31. 31. Organizational Responses  Strategic Systems provide advantages that enable organizations to increase market share and/or profits, better negotiate with suppliers, or prevent competitors from entering their markets  Customer Focus is the difference between attracting and keeping customers by providing superb customer service and losing them to competitors31 Chapter 1
  32. 32. Organizational Responses (Continued)  Make-to-Order is a strategy of producing customized products and services  Mass Customization is producing a large quantity of items, but customizing them to fit the desire of each customer  E-business and E-commerce is the strategy of doing business electronically32 Chapter 1
  33. 33. What is an Information System?  An IS is a system that collects, processes, stores, analyzes and disseminates information for a specific purpose.  An IS includes :  Inputs(data, instructions)  Outputs (reports, calculation)  Process  Feedback33 Chapter 1
  34. 34. Information System34 Chapter 1
  35. 35. Formal and Informal IS  Formal systems include agreed-upon procedures, standard inputs, outputs and fixed definitions.  Informal systems may be in any form or shape, ranging from an office gossip network or group of friends exchanging letters electronically.35 Chapter 1
  36. 36. What is a CBIS?  Computer Based Information System.  CBIS is an IS that uses computer technology to perform some or all of its intended tasks.  Can include PCs and software.  1000s of varying sized computers, printers, plotters, networking devices and databases.36 Chapter 1
  37. 37. Business Information System37 Chapter 1
  38. 38. Components of CBIS  Hardware  Software  Database  Network  Procedures  People  Purpose  Social Context38 Chapter 1
  39. 39. What is an Information Technology?  IT is the collection of computing systems used by an organization.  It refers to the technological side of an information system.  IT includes:  Hardware, software  Databases, networks and  Other Electronic devices39 Chapter 1
  40. 40. Why Should You Learn about Information Technology (IT)?  IT is essential for work in organizations  IT will reduce the number of middle managers  IT will change the manager’s job  IT impacts employees at work  IT impacts employees’ health and safety  IT is used by all departments40 Chapter 1
  41. 41. Why Should You Learn about IT? (Continued)  IT provides opportunities for people with disabilities  IT provides quality-of-life improvements  Improvements in health care  Crime fighting and other benefits41 Chapter 1
  42. 42. Managerial Issues  Recognizing opportunities for using IT and Web- based systems.  Who will build, operate, and maintain the information systems. How much IT?  How much and HOW important is IT?  Is the situation going to change?  Globalization.  Ethics and social issues.  Transforming the organization to the digital economy.42 Chapter 1
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